If you own a Sydney property and are looking to move overseas or interstate, you’ll need to decide if you should sell it or rent it out. Both options have their advantages, depending on your financial situation and your future plans. There’s no right answer, only one that will work for you.
Read on for an overview of the options you have when you move overseas or interstate, and the pros and cons of each.
Rent out your property
If you plan to return to Sydney, hanging on to your real estate may be the best option. You can hand your Sydney property over a property manager – read more about our services here. With this option, you can then rent a property in your new location. Ideally, your rental income should cover some or all of your rent.
When you decide to return, simply give your tenants notice to vacate and move back in.
Sell your property before you go
The “rip-the-bandaid-off” option is to cut all financial ties with your former home and sell before you leave. This isn’t an easy option. Your move becomes more permanent, and it’s a huge added stress to what is already a busy time.
However, it can make financial sense. Firstly, your main residence is exempt from capital gains tax. This means any money you make on your own residence is untaxed. This exemption applies for up to six years after you move, but the rules are set to change for overseas residents. Check the ATO website for the latest guidelines.
From a financial point of view, the opportunity to make a tax-free profit is worth considering. If you sell your home while you are still living in it, you can control how it looks for open homes and second viewings. This can make a significant difference to your final sales price. Selling your home means you can set up faster in your new location, with a short-term rental while you look to buy. It also saves you the stress of servicing a mortgage while paying your ongoing living costs and renting your new home, if the rental income doesn’t cover the mortgage.
Settle in your new home, then sell
Often, in the excitement and stress of a big move, taking on a property sale is an extra task you can’t face. Some property owners choose to rent out their property for a while, to see how their move goes. They then make a decision to sell further along the line.
Perhaps you will rent in your new location, decide you want to stay, and start looking around to buy. Once you decide, you may wish to sell your old home. This can work, as it allows you to collect rental income on your old home close to the point at which you buy your new one. At Boutique Property Agents, we often sell properties for people who are overseas or interstate. You can read more on how it works here.
Selling a tenanted property is often very straightforward. However, you don’t have as much control over its presentation, unless you choose to evict your tenants. And then of course you also risk not selling it and not having rental income.
Sometimes the decision is made for you. Some people test the market, trying to sell their home while still living in it. If it doesn’t sell, they pack up and rent it out, then try again a year or two later.
As you can see, there are benefits and downsides to every option. What it comes down to is what works for you, and your particular situation.
Talk to us
Every client we work with has a unique reason for selling. We will always listen carefully to your particular set of circumstances to help you find the best possible solution.
If you are moving away from Sydney and want to have an informal chat about what the market is doing right now, please give us a call and we will be happy to help.